General Iron’s move to South Side got city boost, emails show

City officials were closely involved three years ago in numerous steps leading up to the controversial relocation of the car-shredding operations of General Iron to the Southeast Side, a review of hundreds of pages of emails shows.

The behind-the-scenes involvement with top officials of former Mayor Rahm Emanuel’s administration are now among the activities being scrutinized in two federal civil rights complaints that allege environmental racism as the city helped move a source of pollution out of the white, wealthy Lincoln Park neighborhood to a Latino-majority community in Chicago’s 10th Ward, which already suffers from poor air quality.

From at least early 2018, top city officials discussed the relocation of the polluting business, even noting a “possible 10th ward relocation.” A planned announcement of General Iron’s intent to sell its 20-acre Lincoln Park land, coveted by developers, was halted at the city’s request during that time so plans could be announced jointly with the city at a later date. The business’ representatives communicated often and scheduled in-person meetings with top officials, records show.

Just before a July 2018 announcement that Reserve Management Group, which operates several businesses on the Southeast Side, would acquire General Iron and move its operations, city officials scrambled to coordinate the news release with company representatives.

None of this was out of the ordinary, Mayor Lori Lightfoot’s administration said on Friday, defending the Emanuel-era actions and adding the city had “no role in choosing the location for the expansion.”

An environmental activist involved with one of the civil rights complaints criticized the close communication between the city and General Iron.

“We see these officials then and now refusing to put the health of Chicago residents before polluting industries,” said Olga Bautista, a Southeast Side community organizer.

Tyler LaRiviere/Sun-Times

The emails, obtained through Illinois Freedom of Information Act requests, show that months before the July 2018 announcement, city officials appeared to be planning for General Iron’s move south, discussing amending city laws pertaining to metal-shredding operations and other considerations.

“We need to prioritize [a] standard for shredders,” former Planning and Development Commissioner David Reifman said in a May 15, 2018, email to staff members, noting the “possible 10th ward relocation.”

Just a few days before, 10th Ward Ald. Susan Sadlowski Garza told a small group of community members at a meeting that high-ranking members in Mayor Rahm Emanuel’s administration were reaching out to her to support the relocation of the business to her ward, according to five people who attended the meeting.

The attendees said Garza didn’t appear to support the move at the time. By June, however, Garza appeared to be on board, writing to Reifman. “I’d like to make General Iron the poster child for the Green Economic Corridor,” a reference to a community planning initiative to bring sustainable development rather than polluting industry to the area. Reifman emailed former Deputy Mayor Robert Rivkin suggesting they forward her comment to General Iron.

Garza says despite that comment, “I was never included in any of the coordinating to make this happen.”

The communications show an active role for Reifman and Rivkin. Later in 2018, Reifman even reviewed a letter of intent from General Iron’s real estate broker for the property that still has not been sold. Reifman and Rivkin did not respond to requests for comment.

Lightfoot’s administration is still considering whether to issue the final permit needed for the new scrap metal operation to open and has denied that it aided the move since assuming oversight of the issue from the Emanuel Administration.

Lightfoot’s law department signed a two-page “term sheet” in 2019 laying out an agreement between the city and the company for its departure from Lincoln Park and relocation to the Southeast Side. In a federal court hearing last month, an RMG lawyer made a strong assertion that there was no government role in the relocation.

“The city had absolutely nothing to do with the location of this new facility,” RMG lawyer David Chizewer said in the hearing. “The city played no role in that whatsoever. Zero.”

Ashlee Rezin Garcia/Sun-Times, Ashlee Rezin Garcia/Sun-Times

RMG is awaiting a city permit to open a new operation at East 116th Street along the Calumet River, where the company has existing businesses. The city says it didn’t influence the proposed expansion of RMG’s existing business, though acknowledges the early coordination with the company.

“As is the case with any business that is looking to the City for guidance while considering expanding an existing operation, the City engages in conversations with the business operator — in this case General Iron and RMG — on issues such as the timing of the cessation of operations as part of that proposed asset sale,” the city law department said in a statement.

That July 2018 news release of the merger also announced the Labkon family, which then owned General Iron, would retain the Lincoln Park land and market it through a real estate broker.

The Labkons had planned to announce in March 2018 they were putting the land up for sale — until city officials halted the process, emails show.

General Iron’s then-lobbyist Victor Reyes reached out to Reifman, Rivkin and other city officials with the beginning of a draft news release that would announce on March 23 the land was for sale.

“Thanks for talking to me today,” Reyes said in a March 22 email to Reifman. “At your request we will delay the announcement regarding the business transition and sale of real estate that was to occur tomorrow Friday the 23rd. We want to cooperate on the announcement with you and the appropriate City personnel. Let me know when we can talk to agree on the process going forward.”

That announcement didn’t come until the July 2018 press release about the RMG deal. Reyes deferred questions to the city, which said in a statement “as is often the case, the City worked cooperatively with the private sector regarding an event that would be of interest and potential significance to City residents, and that would implicate the City’s regulatory processes, such as permitting.”

Reifman’s involvement with the land transaction continued through later that year. After the Labkons’ real estate broker prepared a letter of intent for the sale of their land to Lincoln Yards developer Sterling Bay for nearly $98 million, it was sent to Reifman who shared the letter with Rivkin.

“Almost there,” Reifman said in an email to Rivkin.

“Great - makes it real and shuts up the flat earthers who keep insisting GI is not moving,” Rivkin responded, referring to Lincoln Park residents who considered General Iron a nuisance but doubted it would move or be shut down.

Though General Iron has halted operations in Lincoln Park, the land still has not sold.

Brett Chase’s reporting on the environment and public health is made possible by a grant from The Chicago Community Trust.

Dave Newbart/Sun-Times